Emami looks at inorganic opportunities in ayurvedic space

FMCG major Emami Ltd, which is looking at inorganic opportunities in the ayurvedic segment in India as well as abroad, is hoping that its future growth would come from core brands and brand extensions in the space, a company official said on Tuesday.

The brand extensions can take place in haircare, personalcare and skin care, he said, adding that everywhere there is a lot of scope

“In the ayurvedic business, our growth will come from core brands, it could also come from brand extensions,” the company’s Chief Financial Officer N.H. Bhansali told reporters here on the sidelines of inauguration of firm’s third manufacturing plant at Pacharia in Assam’s Kamrup district.

“The company is also looking at inorganic opportunities in India and overseas.”

The new facility, spread over a total planned floor area of over 50,000 sqm for a total capacity of 90,000 mtpa, is built at an investment of Rs 300 crore.

The brand extensions can take place in haircare, personalcare and skin care, he said, adding that everywhere there is a lot of scope.

Asked whether the company is looking into brands or business acquisitions, he said: “It will depend whether we will be looking into brand acquisition or acquisition of production facilities… it will depend on the opportunities which will come.

“What makes sense for us, we will look into them. But generally, in our business, the brands are very important.”

On the possible geographies for any acquisitions that may take place, he said its focus countries would be Middle East, Russia, Africa, South East Asia.

The Rs 50,000 crore Emami group of companies has a portfolio of nearly 300 products based on ayurvedic formulations.

Asked whether the company would consider any price reduction of its products following tax rate cuts of some of FMCG items under Goods and Services Tax (GST), Bhansali said: “We need to evaluate the situation in totality.”

Further, he said, while there have been some relaxations, still there is no clarity on the refunds, which were earlier available for the exemptions for Northeast and other exempted zones.

“Those refunds have been restricted or halved in many of the cases. So a full clarity is required before we take a decision. And before that we need to make our calculations first.”

He also said the wholesale trade channel has been amongst the worst affected post demonetisation and roll out of GST. However, normalcy is coming in now, he added.